Kirk Jowers, director of the Hinckley Institute of Politics, has found himself in a fight over the use of $75,000 donated to the institute by national Republican consultant Peter Valcarce. (Stuart Johnson, Deseret News)

SALT LAKE CITY — A political fight has broke out between the owner of a multimillion-dollar national Republican direct-mailing business and Hinckley Institute of Politics Director Kirk Jowers.

Political insiders tell the Deseret News the timing of the controversy may be meant as a warning to Jowers and others to lay off their attempts to shake up rules within the Utah GOP — and could signal a larger battle among officials inside the party.

The tension is over a $200,000 anonymous donation Peter Valcarce made to the University of Utah's Hinckley Institute of Politics in 2008. In a thank you letter sent to Valcarce, signed by then U. president Michael Young, he was notified that $75,000 of his anonymous donation was put in the Kirk and Kristen Jowers International Scholarship for the Hinckley Institute of Politics.

"It was a shock," Valcarce said, adding he felt that Jowers had used his money to "parade it around for his own credit."

The event that Valcarce said pushed him over the edge was when Jowers went on KSL's Doug Wright Show to offer a $25,000 matching donation to raise funds for a memorial scholarship for Wright's son, Eric Wright, who died while serving a Washington, D.C., internship for the Hinckley Institute. Those funds would come out of Jowers' scholarship fund.

Jowers said that while Valcarce's money was a "sizable minority" of his total $166,000 fund, not a penny of Valcarce's money went toward the Wright scholarship effort.

Valcarce said he sent a letter to the U.'s office of the president, demanding that the $75,000 be removed from Jowers' fund and placed in a fund honoring Rep. Rob Bishop, R-Utah.

To date, over two years later, Valcarce claims he has never received a letter from the U. president, or Jowers, acknowledging that the funds have been moved.

"Peter and I certainly had a falling out since he made the generous donation," Jowers said. "We tried to address what should be done with it and honor his intentions."

While Valcarce had requested the donation be anonymous, he admits that he did not give specific immediate instructions, but indicated that instructions would come later.

Jowers said that during an Oct. 9, 2010, meeting with Valcarce, the two agreed that $40,000 would be removed from the Jowers fund and placed in the Bishop fund with an additional $35,000 moved once the endowment generated additional cash to move.

Valcarce said his understanding was that all $75,000 would be moved immediately and he was disappointed and angry. "This is simply about a donation that is well meaning that has been taken to benefit one person's career," he said.

But what has been a small argument over $35,000 has blown up into a political fight. Valcarce said he has sent a detailed letter to both majority and minority leadership at the Legislature, the Utah Board of Regents and U. Board of Trustees, accusing Jowers of unethical behavior and discouraging donations to the U.

"I don't know how his action in this matter would be described in academia, but in the private sector it would be called 'theft!'" Valcarce wrote. The letters are expected to hit the desk of officials sometime Tuesday.

While Valcarce is fairly unknown in Utah politics, he is no stranger on the national GOP front. The owner of Arena Communication, Valcarce has made millions orchestrating direct mail campaigns for Republican candidates across the U.S.

Inc. Magazine published a profile of Arena Communication, in which Valcarce was quoted as making his living creating "high quality junk mail." The company boasts that 70 percent of its clients won their races. About 30 percent of the company's business comes from "franking" or official taxpayer-funded mailings. Some have branded him the "hit man of the far right." As of 2004, his company was worth an estimated $12.8 million.

Valcarce is a graduate of Brigham Young University, and one of his first political jobs was working for Sen. Orrin Hatch, R-Utah, in his Utah office. He later went on to work on congressional campaigns for Enid Greene and Chris Cannon. Since then, his client list boasts a long list of Republican elites, including George W. Bush, Sen. Saxby Chamblis, Sen. Mitch McConnell, Rep. Michelle Bachmann, Rep. Rob Bishop and a host of GOP state and national committees and conservative organizations.

Political insiders tell the Deseret News that this fight between Valcarce and Jowers has a much larger context, saying Jowers has rattled the cages of Tea Party Republicans by moving to change the ways in which the Utah Republican Party does business. For example, Jowers enraged some Utah conservatives when he proposed opening the party's caucus process to allow more voter participation.

Insiders say the timing of the scholarship donation fight was orchestrated as a warning to Jowers to leave well enough alone, and to make an example of him.

The donation to the U. did not come from Valcarce directly but rather through the Valcarce Foundation, a non-profit charitable organization set up by him, with assets set at $621,596 and generating revenue around $31,000, according to IRS filing information. Several sources have told the Deseret News that Valcarce was motivated to donate to the U. and BYU because the IRS had noticed that no charitable contributions had been made from the foundation. When asked, Valcarce said he was not in trouble with the IRS, but rather had an "obligation to make some donation."

Valcarce denies that there is any political motivation beyond wanting to make sure his money is not used for Jowers' political benefit.

"I'm barely involved in Utah politics," he said. "This showed low class. It basically showed that he was willing to do anything for his own personal gain."

As someone who likes to operate behind the scenes at the national level, Valcarce initially wanted to remain anonymous. But he said he felt strongly enough about this issue that he wanted to come forward.